Skip to main content

tv   International Programming  CSPAN  February 23, 2011 7:00am-7:30am EST

7:00 am
>> it was smaller than it was last year. you can look, for example, at the congressional budget office updated their long run budget outlook and it incorporates the effective health reform and you'll see the deficit, long-term deficit fell by about 2% of gdp as a result of that reform and we generally talk about a trillion dollars over the next detective and i reject that premise going forward in that the president put out a lot of -- there's a lot of choices about the president's budget and
7:01 am
that's a budget that a sacrificed the goal they had for about two years which was to figure out how to get the deficit down to about 3% of gdp medium term to stabilize the debt to gdp range. a year ago our budget didn't do that and so we called for a fiscal commission to bridge the gap between our deficits then which were about 3.5 or 4% of gdp and where we wanted to be. this year through the additional things we did on the discretionary side are things like unemployment insurance solvency. pbg reform, fha reform, you know, a whole bunch of areas. we achieved that goal. the president put down a major down payment. if we were to adopt it, you know, from beginning to end, it would be a significant contribution to our fiscal policy over the next decade but as a i said it doesn't solve all
7:02 am
our problems so we still want to leave room for congress to work with us as well. >> hi, jason. my name is lyndon boozer, i have a question for you. what is your opinion on the current state of the economy? you know, we've seen consecutive quarters of gdp growth we've seen a year of job growth. you know, normally recoveries are pretty bumpy, it gets better, it gets worse, it gets better, it gets worse we've been lucky to be that every quarter is stronger than the last for job job and other quarters are stronger than the last in terms of job growth. looking forward, you know, it's important to recognize like the tax agreement we reached in december. most of the forecasters were fwaeshging growth of around 2.5%
7:03 am
before we reached that agreement. since it, they've raised their forecast, you know, in the neighborhood of 3.5 to 4% economic growth. people were expecting about a million extra jobs as a result of that tax agreement. and, you know, you see that because consumers are spending but you also see businesses increasing their investment due to things like the expensing provision in companies like the one you work for and others who have cited that as a reason why they're able to invest more in the economy. >> could you tell us what role you think the global economy will play in the american recovery? >> uh-huh. i mean, the global economy is, unfortunately, the main role it's playing is a risk -- is more of a role of a downside risk than an upside opportunity for us. and it's one that based on what
7:04 am
you'd expect right now, our growth will be robust enough. our exports are continuing to grow. the world is continuing to buy our goods and services. you know, we're on track in terms of the national export initiatives goal of doubling exports by 2015. so the hope is that it will continue to play a role in helping get ourselves out of this really consumption and exports, the two many places to look because investment isn't going to be the biggest driver of how we get out of the cycle and certainly not housing investment. but there's certainly more ways in which that could turn negative from our expectations than turn positive. >> please turn off your phones. >> tax policy question for you. the president mentioned in the state of the union that the
7:05 am
treasury secretary has testified on the hill recently regarding the possibility of corporate tax reform. and that was not part of the budget unless i missed it. i just wondered particularly given the success that the president had on this issue area reaching across the aisle in december as you noted, what the status of this proposal is? is this something the president is going to advocate aggressive and how would the issue relate in any way to -- strategically to discussions regarding long-term deficit and debt reduction issues. >> right. so in the budget we put forward a bunch of specific ideas. when it come to corporate taxes those were very similar to the ideas that were in the last budget. those are all things that we
7:06 am
continue to think represent sound economic policy. and there might be something nor basic and fundamental than what we put down and if we were able to do that, we'd be willing to do it in a way that was revenue-neutral -- we wouldn't be asking for corporate to remember that would be in the deficit. but in an era of a tough tax budget we can't increase the deficit and at the same time make it clear that we would to have contribute to growth, simplicity, stability, increase investment in the united states. so that is not an explicit we figured it all out here's our corporate tax reform plan but it's a dialog and it's one that we've been having with leaders in the business community, that we've had with experts, that we've had with -- both democrats and republicans in both the house and the senate.
7:07 am
so at the very -- we're still very early on in the discussions and it's something the president is very enthusiastic about. and from ceos who correctly say that the rest of the world have cut their tax rates and the has the highest tax rate in the world and that interferes with our competitives as well as our countries to create jobs here in the inamerica. no one can defend our current international tax system. you might debate the best way in which to change it but from scratch, no one would construct what we have today in that area. but at the same time, you know, our high rate isn't a measure of our companies being overtaxed. we're about average in the pack by some measures of effective tax rates are actually low because we have things more generous depreciation measures and it shows how inefficient our
7:08 am
companies are taxed so that means there's an opportunity there to eliminate some of that inefficiency and simplify the tax system and broaden the base and bring that rate down. and, you know, that's something we're very enthusiastic about. we would like it to emerge from a set of discussions rather than start the conversation by putting, you know, our ideas forward. >> hi. thank you, ken washington a software industries association. some of the criticism that can see from republicans and i don't watch fox news regularly but you hear the repeated attacks on the administration. there are two that i'd like to hear your response to. the first one is that we're -- that you're in the process of reducing the budget from a very high level of 2011, and that while some spending may have been necessary to stabilize the
7:09 am
economy, there's little excuse for the inflated budgets of departments like justice, epa, commerce, agriculture and that we're cutting those budgets down from inflated levels that have been inflated since obama took office. the second piece is one that we hear frequently from the other side of the aisle, especially among folks in the tea party who argue the fundamental tax structure is unfair today because 47% of americans pay no income tax and they really november stake in america. how would you answer both of those criticisms from folks on the other side of the aisle? >> so the first question is -- i would just point to our budget which is we take spending to the lowest share of the economy since eisenhower was president. that was a long time ago and that was the way i think most
7:10 am
economists tend to make of any party or perspective make comparisons of spending over periods of time. so we have a tough budget. and then you have things in the discretionary budget like pell grants. we have a lot more students that go to college part because of the economy so that goes up. a number of things throughout the budget. even though they're discretionary are affected by the economy, veterans falls under discretionary and a lot of that is health care. and the cost of health care goes up, just having that grow with inflation will be in flat and nominal terms isn't going to help you provide the same level of services that you were in 2008. so some of that is a lot of the different items there to do what you were doing before you need to increase as a result which is why people look at the share of the economy and why we bring
7:11 am
that down to the lowest since eisenhower. and again, you like at examples of programs and others there's a lot of things that are being cut by a lot and this is another 198 examples along those lines totaling $33 billion. in answer to your second question, i guess one question i would ask the tea party is, is there proposal that they would like to increase taxes on 47% of americans. and that would seem to solve the problem as they have identified and defined it according to your question. and if that's -- that would be an interesting debate to have. whenever i read opposite he does along those lines, that's exactly the question, why don't they come out and have taxes on 47% or whatever number of percent americans have.
7:12 am
obviously people pay payroll taxes. they pay state and local taxes and people's circumstances vary. a lot of those people are students or, you know, people who recently retired or what have you. and looked out over the course of a lifecycle number isn't anywhere near that so you can't even fred goldberg add clever paper on tax credits some years ago and like it was a carry forward, carry back which is totally standard and acceptable when it comes to corporate taxes as it should be and refundable credit was is in a sense is extending to those individuals who haven't paid taxes in the past and are paying it in the future and we are going through a temporary period of time because of a lifecycle and because of hard times. >> hi. sam stein with the "huffington post." first off i want to let rob know my ring tone is off. >> pardon? >> so my ring tone is off.
7:13 am
>> thanks, sam. >> you touted the economic benefits of the tax cut deal that was reached during the lame duck session. and i'm wondering there's grave concern by simply extending for two years you will keep extending it if the economic conditions in this country haven't improved demonstrably in two years is the door open for the white house to further extend the bush tax cuts for the upper income -- >> the president has been completely clear that the two-year extension -- the reason for those economic benefits i talked about was everything the president secured in the agreement. the payroll tax cut, the 100% expensing, the refundable tax credits, unemployment insurance. those are the reasons that that forecast increased and that isn't just my argument. part of why we know that is most of the forecasts actually are in
7:14 am
the high income and then they got extended and that's what most economic forecasters thought in the beginning of december. the news to them was that the president fought for and secured all of these economic measures. he's been crystal clear. he didn't want them then. he didn't think even in the economic circumstances we had, you know, two months ago that the high incomed tax cuts were inappropriate or remotely cost-effective way to deal with those problems. and so that answer won't change two years from now. no, he will not extend those, won't have those extended. there's no economic standard in which high income tax makes shen. >> there was an op-ed today about social security that's not contributing to the deficit problems. is the white house's position now that security reform is objects tensebly -- ostensibly
7:15 am
off the table. >> what the president said in his press conference last week and what jack said in his op-ed today, the social security challenge is not one that you care about because you're worried about our long run fiscal future. you want to strengthen social security. it's such a critical part of our social insurance, bedrock of retirement for senior citizens. one of the antipoverty for children and critical for people with disabilities and other survivors. and for all those reasons, and the fact that it's solvency is a period in which you can pay full benefits is another six years through 2037. the motivation is strengthening
7:16 am
it and the president talked about what he would and wouldn't do in that and we're not slashing benefits, not hurting the basic benefits of current retirees, not privatizing the system and making sure if you're doing it you really were strengthening it and improving those perspectives so i think that's the way you want to understand that as we don't see this as part of the solution of the long run fiscal challenge, but it remains important for the sake of social security itself. >> i just wanted to ask -- you mentioned the savings but that's against you guys' adjusted baseline. the regular cbo baseline for years has been looked at sort of like not counting during the time when the tax cuts were not -- before the tax cuts
7:17 am
expired before the extension. what i'm trying to get at is if everyone is not sure by what measure to measure fiscal policy by, isn't -- doesn't that mean that at some point you need to go back to the cbo baseline to measure your fiscal policy versus the gop's fiscal policy? isn't there a certain confusion in the air by everyone wanting to use different baselines to measure their fiscal reck attitude? >> uh-huh. first of all, i'd -- this is like a topic i could talk about for hours. i will try my hardest not to. some of the differences i talked about between the president's portfolio and the parts of a plan that the republicans have put forward today, the trillion dollar difference between those is obviously unrelated to any baseline we choose. so that basic contrast holds
7:18 am
true regardless, number one. number two, i think you could make an argument and the baseline that's been used by everyone from the committee for responsible federal budget to goldman sachs to the administration in the last two years assumed all the tax cuts were continuing. if we used that we would have claimed an extra trillion dollars in deficit reduction from not allowing the high income tax cuts to continue. we decided that given the passage of statutory paygo and a shift in the framework that it made sense to shift our baseline in light of that. so we're not actually taking credit for that extra trillion. that, you know, under other circumstances might have been perfectly reasonable credit for. the problem with the cbo baseline i don't think anyone thinks it's remotely realistic to think all the tax cuts, the amt, the sgr, you know, every one of those things is going away. so we try to make a set of
7:19 am
adjustments largely grounded in statute that congress passed statutory paygo, some additional adjustments for monies beyond that but the most significant adjustments we made were based in a law that congress passed and the president signed. but regardless none of that changes the basic story which is that we stabilized the debt to gdp ratio, which is knots where we are today. >> richard, two quick questions. we've heard it said by the president's opponents at both countless times that before the stimulus unemployment would be capped at 8%, if it were enacted and the answer is, well, the economy was much worse than we thought. that's why we made that claim. we're going to hear it countless times more probably including in whatever debate the president has in the fall of 2012 is that his best answer that the economy
7:20 am
was worse than he thought? that's question 1. 2, repeating claims while these trillions of dollars are sitting on the sideline. you hear of the business community saying uncertainty. you hear economists say lack of demand do you see an objective support for one position or others saying it's not just a rhetorical clash that seems to be accomplishing anything? >> uh-huh. i mean, in answer to your first question, sure. in the year and a half we can figure out exactly what the best line to use in the debate is. the actual truth is you look at every forecast that every forecaster made back then. and you compare it to that bernstein paper you referenced and they're baseline absent the stimulus unemployment rate was basically the same was what all those other forecasts have.
7:21 am
even the most pessimistic eye forecasters were -- you know, they had an unemployment rate a little bit above that line but nowhere near what we eventually saw or counter-factually would have seen. that's the truth. the baseline forecast that was done there was grounded in what everyone was projecting at the time. certainly most of the people who have gone back and looked at the effect of the recovery act and the other fiscal measures say it made a huge difference in terms of what the unemployment rate was when you take it together with the financial stabilization, and i think they said you would have had a 15% rate. so the other thing people will see now and will see from a year from now that the economy is growing. >> it's creating jobs from last year. the pace will accelerate this year and so a certain amount of
7:22 am
the proof will be in the pudding, not in some paper released in january, you know, four years ago showed such claims such and such but, you know, what's actually happened are you moving in the right direction or the wrong direction or if i'm moving in the right direction right now. in terms of your second question, i actually think it's interesting. i don't -- i have seen the uncertainty argument made much, much less frequently in the last few months. and maybe that's, you know, a whole bunch of reasons one could imagine for that. that's not actually -- i don't even feel that's one of the dominant arguments anymore. certainly i'm more partial as a demand explanation the reason for that being most of that capital is in sectors of economy where it's hard to imagine regulation or the other set of issues having quit as big an
7:23 am
impact as anyone would say they would. i mean, the fact that a year ago it was perfectly rational for someone not to invest because they were concerned about the future of the economy. i think it becomes less and less rational over time and possibly reflecting that fact you actually saw for the first time that total amount of cash sitting on the sidelines actually fell. and we're certainly trying to give it an incentive to fall through things like expensing or business investment as well as support for aggregate demands. but it's a hypothesis. >> let me make one point that's a little more partisan perhaps than jason would be comfortable with. if you want to see the impact of the stimulus and this kind of stimulus compare the jobs record for the first 18 months of this administration with the first 18 months of the bush
7:24 am
administration. they both came in with recessions. although the bush recession was the briefest and mildest of the post-war era and the one that the president had to deal with was the longest and deepest in the post-war era. if you look at the whole 18-month period on net, we've created i think about 750,000 jobs after we lost a million and then created 1.7 million. and the first 18 months of the bush administration, they lost 1.7 million jobs. jobs kept on being destroyed, private sector jobs for it is last two years but despite the very large but the entire tax driven stimulus in the bush administration. so by any measure the jobs record and the downturn in the
7:25 am
obama administration is league superior to the approach used by the bush administration. >> if we could have another question. >> i'm mack from the university of maryland. about all the commissions that have looked at the deficit medium and long term have suggested that something more substantial is going to have to be done with revenues including perhaps raising income taxes directly for that sacred 97% of the population. the president has so far held harmless. i would mention at the university of maryland we've done a study, a survey, a rondly selected citizens who have been asked to address the discretionary deficit and they ended up going by line and have both reduced spending substantially but increased taxes including on all income groups more substantially. this suggests there might be more public readiness to do
7:26 am
something on the tax fronts than the -- both parties particularly republicans seem to feel. but my question, but they seemed to offer a nice, very complicated way out which is radical tax reform so you can maybe bring down the rates but gets more revenue because -- [inaudible] >> is the president or his people push behind the scenes or hang around that? >> certainly the president put forward a budget that achieves our medium-term fiscal foundation and does it with a promise knots to raise taxes in households that are below 250,000 for married couples so he's shown how it can be country. now, one of the elements he does is something he could think of is like a down payment on tax
7:27 am
reform which is he takes the tax expenditures for high taxes and limit those deductions to 28%. and that was an idea that didn't get a whole lot of congressional interest i think it would be fair to say in the last two years. given our fiscal commission and others' interest in tax expenditures, that might be a right, easy place for people to begin their reexamination of that question by looking at that proposal with fresh eyes. >> let's have one more question. this is after all one of the busiest men in washington. yes. >> yes. >> at least 'cause jeanie is here. hi jason, paul levinson. should there be a protracted
7:28 am
budget stalemate for a delay in raising the debt ceiling, what might be the impact on both economic growth and job creation in the near term and long-term future? >> right. again, i mean, for a shutdown for the debt ceiling, i mean, it's pretty much the same perspective, which is the congressional leaders have said they don't want that to happen. that they don't expect it to happen. the president certainly doesn't want it to happen. and certainly doesn't expect it to happen that. there are obviously some differences of opinion, you know, those are issues, you know, that will have to be worked through so i don't think it would come to that. in terms of the real difference for the economy that i'd focus on, though, what does it mean to short-term growth if you're making very large cuts in the budget very abruptly this year when job growth is starting to strengthen but isn't so strong
7:29 am
that they could sustain a very large movement opposite direction. so i would focus on that question and then the other question is what are you doing for medium and long-term growth in terms of the investments you're making and the areas i began with, innovation, education, and infrastructure. so i think those are the important economic questions and debates. and the other things are things that, you know, we certainly believe we shouldn't have to -- have to get to or find out the answer to. >> so, jason, thank you so much. i just want to make one observation before we go it was based on a question that was asked earlier is that it seems like so much of the debate right now between the republicans and the democrats is in some ways dependent upon what you determine what the actual economic challenges are and what problem you're trying
left
right

64 Views

disc Borrow a DVD of this show
info Stream Only

Uploaded by TV Archive on